5 common insurance myths Australian women ask about (and what you need to know)

I have worked with women and money for far too many years for me to want to acknowledge! Almost 30 years, to be precise. In that time I have had literally thousands of conversations with women about personal insurance, and I have developed a very clear understanding of the values and beliefs women hold about protecting themselves in the event of sickness, accident or illness. Across all of those conversations, five things keep surfacing. Five beliefs that come up again and again, that shape how women approach insurance and whether they take it out at all.

I want to take this opportunity to address each of those beliefs directly as I believe it is important to share the views of someone who has sat across the table from women and their families at some of the most difficult moments of their lives, and seen first hand what the presence or absence of cover actually means.

I have watched what happens when a serious illness or accident strikes and there is no financial protection in place. There is a scramble for resources, and the reality of families being forced to make impossible decisions.  Many people would not be aware, but according to Zurich’s Cost of Care research, the estimated lifetime cost of a cancer diagnosis ranges from $23,310 - $109,300 depending on the type of cancer. The average person does not have access to this type a funding, so without insurance, options become limited.

So why do so many women still not have adequate insurance cover in place? It is a question worth investigating, because the gap between what women have and what they need is significant and growing.
 

Why don't more Australian women have adequate insurance cover?

The underinsurance problem in Australia is not a small one. A 2023 Savvy survey found that 46% of women don’t have nor want life insurance, and the Financial Services Council in 2022 found that 3.4 million Australians are underinsured for Income Protection. These are not abstract numbers, they represent people who need financial protection and yet when they need to call on it they will find that it is not there.
 

Why do women find it hard to engage with insurance?

The reasons women are underrepresented in insurance are not simple. There are however, patterns that emerge consistently across the data and across the conversations I have had over nearly 30 years.

Part of it is what can be labelled the ‘optimism bias’, which is the human tendency to believe that serious illness or injury will happen to someone else. This bias is especially powerful when we are young and healthy, which is when taking out insurance is cheapest and most strategic.

Then there is something I constantly observe, being that women have a deeply ingrained tendency to put others first. I have watched women carefully plan for their children's education, their parents' care, their partner's financial security, while consistently failing to ensure they have a financial safety net of their own. Insurance is, fundamentally, an act of self protection. And too often, women are the last ones they protect.

So with that backdrop, let’s get into the 5 common myths I hear repeatedly about insurance.
 

Myth 1: 'Do I really need insurance if I’m young and healthy?'

Short answer: Potentially yes. Insurance is generally easier and less expensive to obtain when you are younger and in good health, though suitability depends on your personal circumstances.  Insurance cover normally increases each year with age and with some medical issues, so it is likely to be more cost effective at an earlier age.
When we are in our earlier years in life, many of us feel bullet proof and ready to take on the world.  We are growing our careers, potentially travelling, maybe buying a house or growing a family, and we feel strong and healthy.
The good thing about that is, that the younger and healthier you are the lower your insurance premium is likely to be. Taking out cover earlier attracts a lower rate and protects your eligibility before any health changes can affect your application.
More importantly, health events do not wait for a convenient time. If we take mental health as an example, according to the Zurich Cost of Care research 1 in 5 Australians have experienced a mental heath disorder in the past year, and more than 2 in 5 Australians have experienced a mental health disorder in their lifetime.  Something like mental health can strike at any time and can be very disruptive and debilitating.  Having protection in case something like this happens provides immediate peace of mind.
 

Myth 2: 'Is insurance too expensive?'

Short answer: Insurance potentially costs less than you might expect. Life insurance cover of $1,000,000 for a woman in good health can start from $19 per month for someone aged 30, and income protection premiums are generally tax deductible, which meaningfully reduces the real cost. It is always worth getting a quote before concluding it is out of reach.

This is probably the biggest hindrance to people accessing insurance.  Cost of living pressures in Australia are very real, budgets are tight and it is logical for households to review their spending.  However, before making the decision that insurance is unaffordable it is worth understanding what it actually costs as it is likely to be less than people expect.

Based on market comparison data from January 2026¹ which covers multiple Australian insurers including Zurich, life insurance cover of $1,000,000 for a woman in good health who does not smoke typically ranges from $19 to $38 per month at age 30, $26 to $36 per month at age 40, and $58 to $78 per month at age 50. Trauma cover of $100,000 ranges from $19 to $49 per month at age 30, $29 to $72 per month at age 40, and $73 to $120 per month at age 50.

When it comes to income protection insurance, what many people do not realise is that income protection premiums are generally tax deductible when you hold the policy personally outside of superannuation (for more on this see tip 5). 

The more useful question is not whether you can afford insurance, it is whether you could afford the alternative of not having it when you most need it.  For most people it is finding that balance – having a little of something is better than nothing when something goes wrong.
 

Myth 3: 'Do I need insurance if I’m single and don’t have kids or dependants?'

Short answer: If you value your financial independence, insurance is one of the most important things to consider.  Life insurance aside, trauma, total and permanent disability (TPD) and income protection cover are all designed to protect you as an individual, not just people with families. If you could not work for an extended period of time, your rent, mortgage and everyday living costs would still need to be paid.

I have spoken to many women over the years who have held the belief that personal insurances should be the domain of those with families.  The reality is that with the exception of life insurance, the other 3 types of personal cover: Total and Permanent Disablement, Trauma Insurance and Income Protection – are all for an individual.

Consider what your financial picture looks like if you were unable to work for six months due to illness or injury, who would cover your rent or mortgage? Who would pay credit card or other debt repayments and cover your everyday living costs? Without income protection, you would be relying entirely on savings, and for many women, that reserve is not substantial enough to bridge a serious gap.

Being single also means there is no one to share the financial burden of recovery. A trauma or critical illness policy can provide a lump sum payment at precisely the moment you need breathing room to focus on getting well, without the additional stress of financial pressure.

Single women who are actively building a career and growing their financial independence arguably have the most to protect. Insurance is about protecting the income and financial security you are working hard to build – and you can consider this your ‘Cover Your Butt’ cover!
 

Myth 4: 'Is cover through super enough?'

You may have some cover, but it may not be the right cover or provide the protection you truly need. Insurance within super is a great starting point, though it is typically set at a minimum level for the average member rather than based on your actual needs. It is worth checking exactly what you hold and whether it would genuinely be sufficient if you needed to claim.

This is the really great thing about the superannuation system in Australia – it allows for the possibility of holding insurances within your super fund.  As discussed earlier, having some cover is definitely better than no cover at all, so super funds provide a service to provide most Australians with the ability to have some cover without it becoming an affordability issue.

I want to recognise that super can be a great option for base level cover, however it is important to determine whether it will be sufficient to provide sufficient protection for what is needed. When it comes to insurances through super it is typically based on something called ‘default cover’ and may be a minimum amount of insurance cover.  There are also different types of policies available inside super and outside super,  so people really need to explore what they have in super and determine whether it is adequate.  It is possible to increase the amount of cover within super, or the alternative is to hold a policy outside super.

It is also really important to be aware that superannuation based insurance is typically limited to life cover, total and permanent disability insurance and income protection. Trauma or critical illness cover, which pays a benefit on diagnosis of conditions like cancer, heart attack or stroke, is typically not available through super at all.

So whilst super can be a good option to hold base levels of cover, the moral to the story here is to work out what cover you actually need, determine what can be held within super and then look at alternatives to top up the remainder of the cover you need.
 

Myth 5: 'Are insurance premiums tax deductible?'

Short answer: Premiums for income protection held personally outside superannuation are generally tax deductible, which can reduce the real annual cost of cover by close to a third depending on your tax bracket. Life and TPD cover held outside super are generally not tax deductible.

OK – let’s debunk this myth.  It is true that not all insurance premiums are tax deductible – however premiums paid for income protection insurance held personally and outside of superannuation are tax deductible in the year in which they are paid. This applies whether you are an employee or working for yourself, provided you are the policy holder and premiums are paid directly by you.

Let’s take a look at 2 practical examples for a female who is in good health and does not smoke, and is in the 32.5% marginal tax bracket (including the Medicare levy).  Using market comparison data from January 2026:

• Monthly benefit: $6,000
• Waiting Period: 2 months
• Benefit Period: 2 years
• Female, in good health and 

Example 1: For a 40 year the cost is approximately $51 per month, or around $612 per year.  The tax deduction reduces that annual cost to approximately $413 per year, equivalent to around $35 per month.

Example 2: At age 50, the annual cost is $1,368.  After-tax the cost reduces to $923 per year, or $77 per month.

It is still important to know that life insurance, trauma insurance and total and permanent disability cover held outside of superannuation are generally not tax deductible, so the myth is not entirely wrong. However for income protection, the tax deductibility is a genuine and often overlooked financial benefit.
 

What to do from here

Myths exist because they feel believable, and some may contain just enough truth to seem reasonable. But the cost of acting on them, of waiting until later, of assuming your super is enough, of deciding you cannot afford it, is a cost that may not become visible until it is too late.

If you are reading this and realising your own insurance has been sitting in the too hard basket for way too long, this is the perfect place to start. 

The four main types of personal insurance worth understanding are life insurance, total and permanent disability insurance, trauma or critical illness insurance, and income protection. Each covers a different scenario. Together, they form a picture of what it would take to protect yourself financially if the unimaginable happened.

Find more information on each type of cover here.